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Master Budget & Balanced Scorecard

I need help with items below.I do not fully understand the questions.

Thank you in advance for your help.

DQ 1

What is a master budget? What are some of the underlying budgets that form the master budget? What is the budgeting process at your organization? Is it effective?

DQ 2
What is the balanced scorecard? Is the balanced scorecard a better method to evaluate management? Describe how a balanced scorecard would be used to manage a company.

I need 200 words for DQ1 and 200 words for DQ2.

Solution Preview

DQ 1

What is a master budget? What are some of the underlying budgets that form the master budget? What is the budgeting process at your organization? Is it effective?

A master budget is a summary of the plans of the company expressing its assets, revenues, equities and costs in monetary terms. The plans set specific targets for activities in sales, production, financing, and distribution. These activities are also integrated and coordinated with each other thru the master budget. The master budget results in a budgeted income statement, a cash budget, and a budgeted balance sheet. In short, a master budget is a comprehensive plan created by management for the future and the means by which these plans are going to be accomplished.
The master budget has the following underlying budgets: Sales budget, Cost of goods sold budget (with the Production budget, Direct labor cost budget, Direct materials purchases budget, Factory overhead cost budget), and the Selling and administrative expenses budget. The Budgeted Balance Sheet consists of the Cash budget and the Capital expenditures budget. This series of budgets are interrelated with each other in such a way that the budget process is begun by estimating the sales. The sales information is provided to the different units ...

Solution Summary

The solution defines master budget, its underlying budgets, and the budgeting process of an organization. It also defines the balanced scorecard and how it is used to manage a company. References are included.

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